Posts Tagged ‘advances’

My Stern Lecture to a Client

February 7, 2013

Sometimes I can’t sell a book to a publisher. Actually, a lot of times I can’t. Even after doing this job for 5 years and getting an estimated 5000 rejection letters explaining why the editor turned me down; even after my rigid filtering process where I reject at least 500 unsolicited author queries for every one that I decide to represent; even when I have become so smitten with a project that I am convinced the publisher will offer a seven figure advance and Spielberg will be on the phone next day begging me to make a movie deal; I still have projects I can’t sell. All agents do. Even the coveted celebrity New York agents who have daily lunches with the coveted celebrity executive editors. Whenever any agent is representing an unknown author, taking a risk, trying to sell a book based on the merits of the project, not just on the author’s celebrity status, there will be rejections.

And when I do sell a book, sometimes for a lot of money, it is usually after I have received 30 rejections from other editors saying: “it’s a really great book, but I just didn’t fall in love with it”, or “it’s competing with another one of our titles”, or “the author has too modest a platform”.

And authors can be even less realistic than I am. After all, they look at the bookstore shelves and see a lot of dreck. They read lots of literary novels that are all well crafted but have a feeling of being sort of the same. They see some really horrible exploitative celebrity memoirs. Really crappy social analysis by gas bag political pundits. And some of these book deals really are getting seven figure advances.

So now what I do just before I submit the project to the publisher is give my client this stern lecture:

“Today I am sending out your book. I believe in it. Otherwise I wouldn’t have worked with you for 4 months polishing the proposal, refining the concept, and (in my humble opinion) making it perfect.

“But you must be realistic. It’s hard to get books published these days. You should hope for the best but expect the worst. I have experience in these matters and will make sure that your book gets to the right editor at the right imprint. I don’t just send books to the same 10 editors and then give up on it. I will send it to all major and not so major publishers who would have an interest in your book. If I can’t sell this book, you can be assured that all avenues have been explored.

“If I can’t find a publisher, it doesn’t mean that your book isn’t good. Sometimes, most times, the decision to publish a book comes down to issues of marketing, not quality or aesthetics.

“But even though your book is good, there are also a lot of other good projects going around. Editors may look at 10 proposals a week or 300 fiction manuscripts a year. Most of them have been heavily vetted by agents. And most of them are publishable. In other words, there is lots of competition.

“You have asked me several times how much your advance will be. I won’t venture a guess on that because my estimates have been wrong so often. Sometimes I expect $20,000 and get an advance for $100,000. Sometimes I get an advance for $7,000, even from the big publishers. Times are tough for publishers just like for the rest of us. The big ones are owned by multimedia conglomerates who are putting a lot of pressure on the publishers to make a lot of money. So publishers have become skittish about big advances. As an agent, I probably can get a publisher to sweeten the deal a little. But publishers base advances on their calculation of sales. They always have a figure in their head of the maximum they will pay. My job is to find out what that figure is and try to find other ways of sweetening the deal when they won’t budge on the advance. I’m an agent, and I don’t have secret alchemical wisdom. I can’t turn lead into gold.

“Don’t expect your publisher to spend a lot of time and energy promoting your book. All those full page ads in The New York Times usually are focused on a very few name brand authors. The publisher really expects you to do the heavy lifting and to promote your own book. They used to send a lot of authors around on 7 city tours. They don’t any more. I have never met an author, no matter how successful, who was satisfied that their publisher promoted their book well. You might ask yourself what kind of added value you get from having a commercial publisher as opposed to self-publishing. It’s a reasonable question to ask. But the answer is complicated.

“I know you would give a great interview on Oprah, Fresh Air, or The Daily Show. And a lot of publishers will make contacts to these and other “A” list venues. But competition for this is fierce and these shows have their own criteria that are often hard to fathom. Again, hope for the best but expect the worst.

“And then there is the Big Enchilada, the Holy Grail. I mean the call from Spielberg. Even though your novel would make a great movie or a tv series, it might not happen. There are a lot of “option” deals for books. Most of them are for very little money, and most of them never go beyond the option. Just like Oprah, movie producers have their own calculations that are not easy to comprehend. Does the book have the kind of 3 act structure that producers want. Will the character in your novel fit with a star who could attract financing? Would the subject of the book require so much resources for production that the film couldn’t make money? Has the producer gone into drug rehab and become unavailable for an indeterminate amount of time? Hope for the best, expect the worst.

“So now I’m sending out the book. Let’s cross our fingers and hope for that seven figure deal. But….remember my #1 rule: be realistic.”


Publisher Advances

October 26, 2009

I’ve been speaking to a lot of authors lately, successful ones who make their living writing. Some of them make a pretty good living. I’m finding that a lot of them don’t really understand the economic fundamentals of publishing. They don’t even understand the meaning of “the book deal” a subject that authors  talk about a lot and even obsess about. Most writers  define a good book deal as a good advance. I’m going to talk about the typical elements in a book deal and try to explain them a little bit to writers.

It is important to understand that any book deal has two sets of negotiations. The first is for “deal points”. This involves issues associated with money and is usually the primary concern of authors (and everybody else involved). After these points are decided, we move on to negotiating the remaining terms of the contract. This is often referred to dismissively  as “boiler plate”. It is really a lot more critical than that  and the interests of the author need to be well represented in this phase as well.

Today I want to talk about the first element in the deal points, the advance. We will try to cover some of the other deal points next week.

A lot of authors expect that an agent has at her disposal certain alchemical powers to get windfall advances from publishers for any project. I wish this were true. I won’t make estimates of how large an advance is likely to be offered on a project. Most of the agents I respect  will be pretty circumspect about that as well. But what can be said is that the bargaining power of the author is really dependent on how many suitors are interested in the project. Having three or four interested publishers creates a seller’s market for the book.  Similarly, if after trying for some months to sell a project, one has a single offer from a smallish publisher, there are only limited opportunities to improve this  through bargaining.

The advance  is always the big enchilada for authors and for agents. It is a convenient shorthand for how big a deal is. As in: “This was a very significant deal. High six figures.” It is certainly a good thing to get money sooner rather than later. And authors who are making a living writing books need money in advance to let them live while the book is being written.

Publishers go to some length in contract negotiations to spread out payments of advances as much as possible. If getting money sooner rather than later is good for authors, dragging out advance payments as long as possible serves the interests of  publishers.  Publishers usually will be quite insistent that advances be paid in 2, 3 or even 4 parts. Smaller advances are usually divided into two equal parts. The first paid on signing; The second on delivery and acceptance of the manuscript. Larger advances may have a third payment upon publication. Recently some publishers have added a fourth payment upon publication of the paperback edition. Calling this an advance is doublespeak. The fourth payment could easily be made 3 years after the contract has been signed.

Publishers and publishing gurus will be quick to tell you that advances are “out of control” or indicative of a “flawed business model” and that 75% of all advances never “earn out”. (More on earning out later). As you might expect, authors and agents see things quite differently. There is a story going around that one big-time agent always says “if an advance ever earns out, I haven’t been doing my job”. I prefer to tell my clients that money is money. Although a big advance is nice, there is also money after advances in the form of royalties. But those royalty checks are going to start rolling in, if at all, down the road a spell.

Sometimes, when an author has a lot of publishing suitors for a particular book, the agent conducts an auction. After a few rounds of bidding, the result may be that the offer of the largest advance gets the book. This might not be so advantageous to the writer. It may very well be that  the best home for the book is a publisher who has offered a smaller advance. Most agents understand this and try to structure an auction in such a way that the advance is not the only determinant  of the best offer.

One often hears stories by authors who believe, probably correctly, that they got an advance that was so disproportionate to the sale of their book, that it has jeopardized their ability to get contracts for future works.

A lot of authors don’t understand that the word “advance” means advance against royalties. What this means is that royalties for actual sale of books will offset the advance. No royalty checks will be paid out to the author  until the total amount of royalties and other income generated from sales exceeds the amount of the advance. This is called earning out. In other words, if you have a $10,000 advance, and your royalty statement shows that you have sold enough books to create royalties of $8500, then you won’t get any royalty payments until you have earned an additional $1500 to offset the advance.

Some publishers are now not giving an advance. Frequently they say that this is a new “business model”, or that they are “sharing the risk with the writer.” I suppose this is a little like calling a used car a “pre-owned car.”  The idea is that writers will agree not to take an advance in exchange for a higher royalty rate, with the hope of getting better revenue down the road if the book is successful. Authors beware to make sure that in this arrangement there really is a significantly better royalty rate that accounts for your own sacrifices and risks  in agreeing to forswear  the advance.

It is conventional wisdom that big advances are desirable for another reason as well. A big investment by a publisher in an advance will insure a big commitment  in marketing and promotion to protect their investment. There is probably truth in this. Although there are many stories of the folly of publishers for paying exorbitant advances and then not following up with commensurate efforts at selling the book.

Next week we are going to talk about some of the other elements of the book deal including: royalties, territorial rights, e-books, and other subsidiary rights.